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Wealth Inequality, Race and Business Ownership

  • Wealth Inequality, Race and the Role of Business
  • The Goodies – This week’s highlight is AEO’s effort to facilitate stakeholder engagement related to the SMART (Straightforward Metrics Around Rate and Total Cost) Box. The engagement process includes a questionnaire due by August 5, 2016.
  • Apologies for the typo in the subject line of last week’s Must Know. Targeting only has one ‘t’.

Wealth Inequality, Race and the Role of Business

As the data continue to show, wealth inequality between communities of color and white Americans continues to grow; white household wealth is 13 times that of African Americans and 10 times that of Latinos. Janet Yellen, Chair of the Federal Reserve, has said that business ownership is one of the four pillars of wealth creation. What are some of the obstacles that African American Business owners face that cause such a wide gap?

Our colleagues at CFED have a new initiative – Toward Financial Resilience for African-American Entrepreneurs in the South. This initiative aims to create and enhance solutions that help financially vulnerable African-American entrepreneurs weather cash flow difficulties and achieve financial well-being through business ownership. They’re through their first step in the process – interviews with over 30 practitioners who serve African-American entrepreneurs in the South. In Unstacking the Deck, we gain a more complete understanding of the problem of how clients experience cash flow difficulties, what drives these difficulties and the solutions currently in place to address them.

CAMEO, CFED, and other organizations work to expand economic opportunity for our diverse communities. We address the racial wealth divide through our lending activities and businesses assistance, our advocacy efforts, and our collaborations. That’s why the CAMEO staff is having a watch party to learn more about racial economic inequality and the actions we all can take to turn the tide. Join CFED’s Assets & Opportunity Network and Racial Wealth Divide Initiative for a webinar — “Programs, Policies, Partnerships: Coming Together to Heal the Racial Wealth Divide” on Wednesday, August 3 from 12-1:30 pm PDT.

CAMEO would like to hear from you about things we could do to advance solutions, while it is top of mind. Please RSVP for a conference call on August 4 at 3:00pm PDT. You will receive the call-in information after you RSVP.

The Goodies

New opportunities for training, conference information, funding, scholarships, and other information that have crossed our desks since the last Must Know. I have posted a running tab of current Industry Goodies on the CAMEO website that lists items that were in past emails. Check it out to make sure you’re not missing anything, like grants whose deadlines are still alive!

AEO Feedback: AEO is facilitating stakeholder engagement related to the SMART (Straightforward Metrics Around Rate and Total Cost) Box. The engagement process includes a questionnaire intended to help solicit feedback from a broad range of stakeholders. Please submit your feedback by August 5, 2016. Background: In May of 2016, OnDeck, Kabbage, and CAN Capital announced an initiative to create and adopt a model disclosure for small business lending with support from AEO. The goal of the Smart Box is to make progress toward advancing transparency for the benefit of small business owners. These three lenders (and others) are committed to adopting a common set of metrics including total cost and APR.

For Your Clients: The California Labor Enforcement Task Force (LETF) has designed new mobile versions of fact sheets to help employers understand and follow labor, licensing and payroll tax laws. The fact sheets have been designed for employers in specific industries including: Agriculture, Automotive, Construction, Garment, Landscaping and Restaurant.

For Your Clients: Small Business Majority is hosting Access to Capital 101: Funding Options to Start and Grow Your Business every Wednesday, the next one is July 27. They present an overview of alternative lending options including community development financial institutions, SBA’s loan guarantee program and reputable online options, key questions to consider when seeking funding, the Small Business Borrowers’ Bill of Rights and helpful tools and resources.

Funding Opportunity: Similar to the CDFI Fund’s Innovation Challenge last year, the Fund is holding a competition for CDFIs to encourage new ideas on how to increase CDFI investment and access to capital in underserved rural communities. The Fund will award up to $1 million for FY16 through the competition. FY 2016 Prize Competition submissions are due by July 29, 2016.

Grant Opportunity: AARP Foundation is launching Work for Yourself@50+, a new initiative designed to educate low-income adults age 50+ about self-employment, including the factors that one needs to consider and first steps that one should take when deciding to work for themselves. This initiative includes the “Five Simple Steps to Get you Started” toolkit, Workshop, and interactive website. AARP Foundation is requesting applications from eligible organizations to partner with the Foundation to host the workshop component. Applications are due August 26, 2016 by 11:59 pm Eastern Time and must be completed online. AARP and AEO will host an informational webinar for participants on August 4, 2016 from 12:00-2:00pm PT,

Professional Development Opportunity: You’re invited to join the CFED Assets & Opportunity Network and Center for Financial Security for a new four-part virtual Listening & Learning Series on Financial Coaching & Counseling. They are on the following Wednesdays from 12:-1:30pm PDT: August 10, and September 14. The A&O Network has also released Financial Coaching Census.

Nonprofit Taxes Webinar: The California Board of Equalization is offering free nonprofit seminars and workshops discuss tax laws, exemptions, and reporting requirements as they apply to non-profit and exempt organizations during the month of August in Perris, Oakland, Apple Valley, Fullerton, and Chula Vista.

For Your Clients: Fund and Fuel Your Dreams is a 2-day event on September 8-9 where you will get hands-on, expert training on how to raise money for your business. You will leave with a step-by-step plan and resources to take the plan forward. It is also a place to connect with like-minded mission-driven, heart centered women entrepreneurs in a supportive fun environment!

Attention CDFIs: The Department of Treasury (Treasury) is seeking your comments on the CDFI Program’s forms and applications. Federal agencies are required to give stakeholders the opportunity to comment on the agency’s forms and information gathering processes. Treasury is soliciting feedback on the Financial Assistance Application and the Technical Assistance Application. Comments are due by September 12, 2016.

PayDay Lending Rules: The Consumer Financial Protection Bureau (CFPB) has proposed a rule aimed at reshaping the market for payday loans and other short-term credit. The proposal would require lenders to ensure that the consumer has the ability to repay the loan, provide notice that the lender is withdrawing funds from the consumer’s account and cease automatic withdraws if the consumer’s account is overdrawn. Comments on this proposal are due September 14, 2016.

New Report: Opportunity Fund released a very important research report, Unaffordable and Unsustainable: The New Business Lending on Main Street.” Until now, we have been relying on stories to explain what’s happening with online lending. Now we’ve got some data on the loans and cash advances being offered to small businesses by short-term, high-cost alternative lenders. Cliff notes on findings: 94% interest rates; average payment is 1.78x income -YIKES.

For Your Client: The National Women’s Business Council has a resource platform for women-owned businesses – The Grow Her Business: A Resource from Start-up to Scale-up. Grow Her Business is a searchable repository of nearly 200 premiere, growth-oriented programs. This platform will serve as a resource of valuable information and guidance for women entrepreneurs seeking to grow and scale their businesses.

For Your Client: OFN has a new small business borrower education platform – Venturize.

FIELD’s EntrepreneurTracker: FIELD worked with 19 microenterprise organizations in 2015 to collect data on the outcomes of 1,086 clients they had served in 2014. Each dollar spent on program costs generated between $8.96 and $9.45 in benefits. Learn more about EntrepreneurTracker.

Take Action: If there’s ever a time in politics that really needs a woman’s voice, that time is now. CAMEO has joined Women Impacting Public Policy (WIPP) for their campaign – WE Decide 2016 – to engage women in business in the 2016 election.